REG - Thor Explorations Ld - FIRST QUARTER 2023 FINANCIAL AND OPERATING RESULTS
30/05/2023 07:15
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RNS Number : 8986A Thor Explorations Ltd 30 May 2023
NEWS RELEASE
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR
DISTRIBUTION TO U.S. WIRE SERVICES
May 30, 2023 TSXV/AIM: THX
.
THOR EXPLORATIONS ANNOUNCES FIRST QUARTER 2023 FINANCIAL AND OPERATING
RESULTS, FOR THE THREE MONTHS ENDING MARCH 31, 2023
Thor Explorations Ltd. (TSXV / AIM: THX) ("Thor Explorations", "Thor" or the
"Company") is pleased to provide an operational and financial review for its
Segilola Gold mine, located in Nigeria ("Segilola"), and for the
Company's mineral exploration properties located in Nigeria and Senegal for
the three months to March 31, 2023 ("Q1 2023" or the "Period").
The Company's Unaudited Consolidated Financial Statements together with the
notes related thereto, as well as the Management's Discussion and Analysis for
the three months ended March 31, 2023, are available on Thor Explorations'
website at https://thorexpl.com/investors/financials/
(https://thorexpl.com/investors/financials/) .
All figures are in US dollars ("US$") unless otherwise stated.
Operational Highlights
Segilola Production
· Gold production for the Period totaled 20,629 ounces ("oz")
o Mill feed grade was 2.95 grammes per tonne ("g/t") gold with recovery at
94.1%
o An increase in mining rates and the mining of higher grade ore zones is
expected in Q2 2023
· The main operating units of the process plant continue to perform
better than expected, with the plant operating above nameplate capacity
Segilola Near-Mine Exploration
· Identification of new high grade quartz vein system within 15
kilometers ("km") of Segilola, with multiple high grade drillhole intercepts
including 1 meter ("m") at 310 g/t gold which equates to 10 oz of gold per
tonne
o Ongoing drilling will test both the strike length and depth potential of
this system with additional drill results expected in Q2 2023
· Regional exploration is continuing with ongoing drilling programs,
stream sediment sampling programs and soil/auger programs with drilling
results also expected in Q2 2023.
Douta
· Mineral Resource Estimate ("MRE") at Douta supported by a total of
64,567 meters of drilling updated to a global resource of approximately 1.78
million oz of gold, an increase of 144% from its maiden resource.
o Updated Douta Resource encompasses the Makosa, Makosa Tail and the
recently discovered Sambara prospects, all of which remain open along strike
and down dip
· During the Period, workstreams designed to advance the project to the
prefeasibility stage ("PFS") commenced including metallurgical and
geotechnical drilling and also infill resource drilling. Drilling results from
Douta are also expected in Q2 2023.
Financial Highlights
· 21,553 oz of gold sold with an average gold price of US$1,902 per
oz
· Cash operating cost of US$899 per oz sold and all-in sustaining
cost ("AISC") of US$1,346 per oz sold
· Q1 2023 revenue of US$40.3 million (Q1 2022: US$24.9 million)
· Q1 2023 EBITDA of US$16.1 million (Q1 2022: US$13.4 million)
· Q1 2023 net profit of US$4.3 million (Q1 2022: US$3.5 million)
· Cash and cash equivalents of US$4.5 million as at 31 March 2023 (Q1
2022: US$6.3 million)
· Senior debt facility with Africa Finance Corporation amended and
restated to facilitate the Company's growth opportunities
o Senior debt facility reduced to US$27.9 million as at 31 March 2023
· Repayment of all outstanding EPC invoices
· Net debt of US$25 million as at 31 March 2023
Environment, Social and Governance
· The full operation of 6 MW compressed natural gas ("CNG") generators
was achieved in January 2023 so as to reduce GHG generated by diesel
o In Q1 2023, the Company's GHG emissions were 5,303 tons. For the
equivalent period in 2022, the GHG emissions were 8,392 tons, a reduction of
3,089 tons representing a drop of 36% in GHG emissions and a significant step
in the reduction of its carbon footprint
· Vegetable farm construction commenced in the Period, including the
erection of a greenhouse. Construction of fish farming ponds and associated
processing and administration structures also commenced using two contractors
from the host communities
Outlook
· Production guidance of 85,000 to 95,000 oz for 2023 maintained,
weighted towards the second half of the year, with an AISC guidance of
US$1,150 to US$1,350 per oz
· Advance exploration programs across the portfolio, including near mine
and underground projects at Segilola, extension and infill programs at Douta
and the assessment of potential targets in Nigeria
· Completion of the Douta preliminary feasibility study ("PFS") in Q4
2023
· Applications for and acquisition of identified prospective
exploration properties in Nigeria
Segun Lawson, President & CEO, stated:
"This was envisaged to be a difficult quarter with a lower mined grade,
difficult mining conditions in the Segilola Pit west wall and a higher
utilization of heavy equipment. The Company's performance during the period
demonstrates the amount of progress we have made at Segilola. The main
operating units continue to perform better than expected and operate above
capacity, so our production at the mine totaled 20,629 ounces. Our costs were
at the higher end of our guidance, however we expect our costs to reduce
materially in the second half of the year as we complete our mining in the
current difficult areas. We have also had our first significant exploration
success outside the Segilola Mine footprint, identifying a new high grade
quartz vein system within 15 kilometres of mine and have already begun
expanding exploration with multiple drillhole intercepts. We look forward to
updating the market with drill results from this program and an additional two
ongoing exploration drilling programs in Nigeria.
"We also continue to progress exploration at a fast pace at the Douta Project.
Further to the significant growth in the MRE we are excited about the upcoming
drilling results from the ongoing exploration program. We also look forward to
completing the various PFS work streams in the coming months.
"As always, we have remained committed to our ESG goals, and this Period
really reflects our ability to safeguard the environment and the local
communities. The full operation of 6MW compressed natural gas generators was
achieved in January and will greatly aid in our attempt to reduce GHG
emissions. Elsewhere, we have been proudly progressing our livelihood
restoration program and we look forward to offering further updates on all
things ESG related throughout the year.
"When compared to the same operating period last year, we have significantly
improved our numbers across the board, which is a testament to the hard work
and efficiencies created in the Company.
"Our production guidance remains between 85,000 and 95,000 oz for 2023, one
that is weighted towards the second half of the year, where we foresee less
difficult operating conditions and correspondingly, a more efficient six
months operationally."
About Thor Explorations
Thor Explorations Ltd. is a mineral exploration company engaged in the
acquisition, exploration, development and production of mineral properties
located in Nigeria, Senegal and Burkina Faso. Thor Explorations holds a 100%
interest in the Segilola Gold Project located in Osun State, Nigeria and has a
70% economic interest in the Douta Gold Project located in south-eastern
Senegal. Thor Explorations trades on AIM and the TSX Venture Exchange under
the symbol "THX".
THOR EXPLORATIONS LTD.
Segun Lawson
President & CEO
For further information please contact:
Thor Explorations Ltd
Email: info@thorexpl.com
Canaccord Genuity (Nominated Adviser & Broker)
Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl
Tel: +44 (0) 20 7523 8000
Hannam & Partners (Broker)
Andrew Chubb / Matt Hasson / Jay Ashfield / Franck Nganou
Tel: +44 (0) 20 7907 8500
Fig House Communications (Investor Relations)
Tel: +1 416 822 6483
Email: investor.relations@thorexpl.com
Ibu Lawson (Investor Relations)
Tel: +447909825446
Email: ibu.lawson@thorexpl.com
BlytheRay (Financial PR)
Tim Blythe / Megan Ray / Said Izagaren
Tel: +44 207 138 3203
Management Discussion & Analysis for Q1 2023
HIGHLIGHTS AND ACTIVITIES - FIRST QUARTER 2023
Operating results for the quarter were highlighted by the selling of 21,553
ounces ("oz") of gold during the year at a cash operating cost(1) of $899 per
oz sold, with an AISC(1) of $1,346 per oz sold.
The Company maintains its production guidance at 85,000 to 95,000 oz for the
year, while AISC(1) guidance for 2023 is also maintained at US$1,150 per ounce
to US$1,350 per ounce.
During the Period, the international price of key consumables used by the
Company, in particular ammonium nitrate and diesel have reduced significantly
from the levels experienced in the second half of 2022. These reductions in
price are expected to result in lower than forecast consumable costs at
Segilola as the Company resupplies.
Table 1.1 Key Operating and Financial Statistics
Operating Three Month period ended March 31, 2023 Three Month period ended March 31, 2022
Gold Sold Au 21,553 13,463
Average realized gold price(1) $/oz 1,902 1,824
Cash operating cost(1) $/oz 899 688
AISC (all-in sustaining cost)(1) $/oz 1,346 1,108
EBITDA(1) $/oz 745 996
Financial Three Month period ended March 31, 2023 Three Month period ended March 31, 2022
Revenue $ 40,287,830 24,865,482
Net Income/(Loss) $ 4,331,347 3,490,938
EBITDA(1) $ 16,065,334 13,414,642
Financial Three Month period ended March 31, 2023 Year ended December 31,
2022
Cash and cash equivalents $ 4,505,071 6,688,037
Deferred Income $ - 6,581,743
Net Debt(1) $ 24,940,762 31,650,722
1 Refer to "Non-IFRS Measures" section.
Segilola Gold Mine, Nigeria
Mining
During the three months ended March 31, 2023, 4,194,689 tonnes of material was
mined, equivalent to a mining rate of 46,608 tonnes of material per day. In
this period, 198,425 tonnes of ore were mined, equivalent to mining rates of
2,205 tonnes of ore per day, at an average grade of 2.85g/t. Tonnes were
affected by difficult mining conditions encountered in the West wall of the
pit. Conditions are improving and an increase in mining rates is expected in
the second quarter of 2023.
Grade was lower than planned due to geotechnical problems encountered in the
North of the pit, delaying access to the higher-grade ore zones in this area.
These zones will now be mined during the second quarter of 2023.
The stockpile balance at the end of the period was 270,215 tonnes of ore at an
average of 1.14g/t. This comprised 2,130 tonnes (4.35g/t) at high grade, 4,327
tonnes (2.03g/t) at medium grade, 273,903 tonnes (1.04g/t) at low grade and
3,442 tonnes (2.65g/t) on the coarse ore stockpile.
Processing
During the three months ended March 31, 2023, a total of 231,001 tonnes of
ore, equivalent to a throughput rate of 2,567 tonnes per day, was processed.
Throughput was affected by an unplanned reline of the SAG mill.
The mill feed grade was 2.95g/t gold with recovery at 94.1% for a total of
20,629 ounces of gold produced. A delay in the commissioning of an additional
crusher, specifically used to reduce mill rejected ore bearing material
("scats"), which was held for several weeks at the Nigerian border crossing,
affected grade during the quarter. The scats will be processed during quarter
2.
All of the main operating units of the process plant continue to perform
better than expected, with the plant operating above nameplate capacity.
Several improvement projects are being undertaken through the remainder of
2023.
Table 1.2: Production Metrics
Units Q1 - 2023 Q4 - 2022 Q3 - 2022 Q2 - 2022 Q1 - 2022
Mining
Total Mined Tonnes 4,194,689 4,296,494 4,018,431 4,031,584 3,759,524
Waste Mined Tonnes 3,996,264 3,974,073 3,793,249 3,747,504 3,533,610
Ore Mined Tonnes 198,425 322,421 225,182 284,079 226,314
Grade g/t Au 2.85 3.51 4.43 3.63 2.68
Daily Total Mining Rate Tonnes/Day 46,608 46,701 43,679 44,303 41,772
Daily Ore Mining Rate Tonnes/Day 2,205 3,505 2,448 3,122 2,515
Stockpile
Ore Stockpiled Tonnes 270,215 300,531 229,909 249,281 179,758
Ore Stockpiled g/t Au 1.14 1.48 1.19 1.46 1.23
Ore Stockpiled oz 9,904 14,300 8,796 11,701 7,109
Processing
Ore Processed Tonnes 231,001 254,824 241,434 211,582 221,900
Grade g/t Au 2.95 3.38 3.58 3.66 3.18
Recovery % 94.1 95.0 95.5 95.5 94.1
Gold Recovered oz 20,629 26,331 26,523 23,785 21,343
Milling Throughput Tonnes/Day 2,567 2,770 2,624 2,325 2,466
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as average realized
gold price, cash operating costs, all-in sustaining costs , net debt and
EBITDA which are not recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. These measures may differ from those made by other
companies and accordingly may not be comparable to such measures as reported
by other companies. These measures have been derived from the Company's
financial statements because the Company believes that, with the achievement
of gold production, they are of assistance in the understanding of the results
of operations and its financial position.
Average realised gold price per ounce sold
The Group believes that, in addition to conventional measures prepared in
accordance with GAAP, the average realised gold price, which takes into
account the impact of gain/losses on forward sale of commodity contracts, is a
metric used to better understand the gold price realised during a period.
Management believes that reflecting the impact of these contracts on the
Group's realised gold price is a relevant measure and increases the
consistency of this calculation with our peer companies.
In addition to the above, in calculating the realised gold price, management
has adjusted the revenues as disclosed in the consolidated financial statement
to exclude by product revenue, relating to silver revenue, and has reflected
the by product revenue as a credit to cash operating costs. The revenues as
disclosed in the interim financial statements have been reconciled to the
gold revenue for all periods presented.
Table 2.1: Average annual realised price per ounce sold
Units Three Month period ended March 31, 2023 Three Month period ended March 31, 2022(1)
Revenues $ 40,287,830 24,865,482
By product revenue $ (43,773) (15,520)
Gold Revenue $ 40,244,057 24,849,962
Gain/(Loss) on forward sale of commodity contracts $ 750,482 (294,922)
Gold Revenue $ 40,994,539 24,555,040
Gold ounces sold oz Au 21,553 13,463
Average realized price per ounce sold $ 1,902 1,824
1 The figures for the Three Month period ended March 31, 2022 have been
restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.
Cash operating cost per ounce
Cash operating cost per oz sold, combined with revenues, can be used to
evaluate the Company's performance and ability to generate operating income
and cash flow from operating activities. The Company believes that, in
addition to conventional measures prepared in accordance with GAAP, certain
investors may find this information useful to evaluate the costs of production
per ounce.
By product revenues are included as a credit to cash operating costs.
Table 2.2: Average annual cash operating cost per ounce of gold
Units Three Month period ended March 31, 2023 Three Month period ended March 31, 2022(1)
Production costs $ 18,306,502 8,219,530
Transportation and refining $ 342,291 502,222
Royalties $ 768,282 550,765
By product revenue $ (43,773) (15,520)
Cash Operating costs $ 19,373,302 9,256,997
Gold ounces sold Oz Au 21,553 13,463
Cash operating cost per ounce sold $/oz 899 688
1 The figures for the Three Month period ended March 31, 2022 have been
restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.
All-in sustaining cost per ounce
AISC provides information on the total cost associated with producing gold.
The Group calculates AISC as the sum of total cash operating costs (as
described above), other administration expenses and sustaining capital, all
divided by the gold ounces sold to arrive at a per oz amount.
Other administration expenses includes administration expenses directly
attributable to the Segilola Gold Mine plus a percentage of corporate
administration costs allocated to supporting the operations of the Segilola
Gold Mine. For the Three Month periods ended March 31, 2023 and 2022, this was
deemed to be 50%.
Other companies may calculate this measure differently as a result of
differences in underlying principles and policies applied.
Table 2.3: Average annual all-in sustaining cost per ounce of gold
Units Three Month period ended March 31, 2023 Three Month period ended March 31, 2022(1)
Cash operating costs(2) $ 19,373,302 9,256,997
Adjusted other administration expenses $ 3,775,777 1,458,731
Sustaining capital(3) $ 5,864,894 4,196,996
Total all-in sustaining cost $ 29,013,973 14,912,724
Gold ounces sold Oz Au 21,553 13,463
All-in sustaining cost per ounce sold $/oz 1,346 1,108
1 The figures for the Three Month period ended March 31, 2022 have been
restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.
2 Refer to Table - 3.2 Cash operating costs.
3 Refer to Table - 3.3a Sustaining and Non-Sustaining Capital
The Group's all-in sustaining costs include sustaining capital expenditures
which management has defined as those capital expenditures related to
producing and selling gold from its on-going mine operations. Non-sustaining
capital is capital expenditure related to major projects or expansions at
existing operations where management believes that these projects will
materially benefit the operations. The distinction between sustaining and
non-sustaining capital is based on the Company's policies and refers to the
definitions set out by the World Gold Council.
This non-GAAP measure provides investors with transparency regarding the
capital costs required to support the on-going operations at its operating
mine, relative to its total capital expenditures. Readers should be aware that
these measures do not have a standardized meaning. It is intended to provide
additional information and should not be considered in isolation, or as a
substitute for measures of performance prepared in accordance with IFRS.
Table 2.3a: Sustaining and Non-Sustaining Capital
Units Three Month period ended March 31, 2023 Three Month period ended March 31, 2022(1)
Property, plant and equipment additions during the period $ 5,719,158 8,484,914
Non-sustaining capital expenditures(2) $ (1,109,993) (5,501,596)
Payment for sustaining leases $ 1,255,729 1,213,678
Sustaining capital(3) $ 5,864,894 4,196,996
1 The figures for the Three Month period ended March 31, 2022 have been
restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.
2 Includes EPC and other construction costs for the Segilola Mine
3 Includes capitalized production stripping costs of $4,609,165 (March 31,
2022: $2,983,318)
Net Debt
Net debt is calculated as total debt adjusted for unamortized deferred
financing charges less cash and cash equivalents and short-term investments at
the end of the reporting period. This measure is used by management to measure
the Company's debt leverage. The Group considers that in addition to
conventional measures prepared in accordance with IFRS, net debt is useful to
evaluate the Group's performance.
Table 2.4: Net Debt
Three Month period ended March 31, 2023 Year Ended December 31, 2022
Loans from the Africa Finance Corporation $ 24,257,746 24,459,939
Due to EPC contractor $ 1,463,353 10,196,105
Deferred element of EPC contract $ 3,724,734 3,682,715
Less:
Cash (4,505,071) (6,688,037)
Net Debt $ 24,940,762 31,650,722
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)
EBITDA is calculated as the total earnings before interest, taxes,
depreciation and amortisation. This measure helps management assess the
operating performance of each operating unit.
Table 2.5: Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA)
Units Three Month period ended March 31, 2023 Three Month period ended March 31, 2022(1)
Net profit/(loss) for the period $ 4,331,347 3,490,938
Amortization and depreciation - owned assets $ 7,165,523 5,004,617
Amortization and depreciation - right of use assets $ 1,194,587 1,158,255
Impairment of Exploration & Evaluation assets $ 3,096 2,701
Interest expense $ 3,370,781 3,758,131
EBITDA $ 16,065,334 13,414,642
Gold ounces sold Oz Au 21,553 13,463
EBITDA per ounce sold $/oz 745 996
1 The figures for the Three Month period ended March 31, 2022 have been
restated in connection with the restatement of the interim financial
statements. Refer to note 22 of the interim financial statements for further
details.
OUTLOOK AND UPCOMING MILESTONES
This Section 5 of the MD&A contains forward looking information as defined
by National Instrument 51-102. Refer to Section 16 of this MD&A for
further information on forward looking statements.
We are focused on advancing the Company's strategic objectives and near-term
milestones which include:
· 2023 Operational Guidance and Outlook
Gold Production oz 85,000-95,000
All-in Sustaining Cost US$/oz Au sold $1,150 - $1,350
Capital Expenditure(1) US$ 8,000,000 - 10,000,000
Exploration Expenditure:
Nigeria(2) US$ 4,200,000
Senegal US$ 3,000,000
1 This excludes production stripping costs capitalizations.
2 This includes purchase of licenses.
· The critical factors that influence whether Segilola can achieve
these targets include:
· Segilola's ability to maintain an adequate supply of consumables (in
particular ammonium nitrate, flux and cyanide) and equipment
· Fluctuations in the price of key consumables, in particular
ammonium nitrate, and diesel
· Segilola's workforce remaining healthy
· Continuing to receive full and on-time payment for gold sales
· Continuing to be able to make local and international payments in
the ordinary course of business
· Continue to advance the Douta project towards preliminary
feasibility study ("PFS")
· Continue to advance exploration programmes across the portfolio:
· Segilola near mine exploration
· Segilola underground project
· Segilola regional exploration programme
· Douta extension programme
· Douta infill programme
· Assess regional potential targets in Nigeria
· Acquiring new concessions and joint venture options on potential
targets
SUMMARY OF QUARTERLY RESULTS
The table below sets forth selected results of operations for the Company's
eight most recently completed quarters.
Table 3.1: Summary of quarterly results
$ 2023 Q1 2022 Q4 2022 Q3 2022 Q2
Mar 31 Dec 31 Sep 30 Jun 30
Revenues 40,287,830 43,251,204 55,703,098 41,354,747
Net profit for period 4,331,347 14,908,460 4,126,066 6,163,942
Basic profit per share (cents) 0.67 2.21 0.65 0.97
$ 2022 Q1 2021 Q4 2021 Q3 2021 Q2
Mar 31 Dec 31 Sep 30 Jun 30
Revenues 24,865,482 6,049,485 - -
Net profit/(loss) for period 3,490,938 3,116,416 463,844 (5,582,090)
Basic profit/(loss) per share (cents) 0.55 0.47 0.07 (0.87)
RESULTS FOR THREE MONTHS ENDED MARCH 31, 2023
The review of the results of operations should be read in conjunction with the
Interim Financial Statements and notes thereto.
The Group reported a net profit of $4,331,347 (0.58 cents per share) for the
three-month period ended March 31, 2023, as compared to a net profit of
$3,490,938 (0.55 cents per share) for the three-month period ended March 31,
2022. The increase in profit for the period was largely due to:
· revenue during the period of $40,287,830 (Q1 2022: $24,865,482)
These were offset partially by:
· Amortization and depreciation of $8,360,110 (Q4 2021: $6,162,872);
· Interest of $3,370,781 (Q1 2022: $3,758,131); and
· Productions costs of $18,306,502 (Q1 2022: $8,219,530)
No interest was earned during the three-month period ended March 31, 2023, and
2022.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2023, the Group had cash of $4,505,688 (December 31 2022:
$6,688,037) and a working capital deficit of $38,308,404 (December 31, 2022:
deficit of $29,116,915).
The decrease in cash from December 31, 2022 is due mainly to cash generated in
operations of $19,214,348 offset by cash used in investing and financing
activities of $15,515,468 and $5,976,329, respectively.
The total EPC amount has been finalized with our EPC contractor, and we have
paid all due outstanding EPC payments at the date of this report.
Working Capital Calculation
The Working Capital Calculation excludes $9,979,413 (2022: $10,187,630) of
Gold Stream liabilities, and $805,801 (2022: $2,215,585) in third party
royalties included in current accounts payable, that are contingent upon the
achievement of the revised gold sales forecast of 85,000 to 95,000 ounces for
the year ending December 31, 2023.
Included in working capital, in Accounts payable and accrued liabilities, is a
balance of $1,463,353 (2022: $10,196,105) due to our EPC contractors. As of
the date of this report, the Company has made all outstanding due payments in
relation to the EPC contract.
Table 4.1: Working Capital
March 31, 2023 December 31, 2022
Current Assets
Cash and Restricted Cash $ 4,505,071 6,688,037
Inventory $ 25,080,808 19,901,262
Amounts receivable, prepaid expenses, advances and deposits $ 8,461,572 10,697,365
Total Current Assets for Working Capital $ 38,047,451 37,286,664
Current Liabilities
Accounts Payable and accrued liabilities $ 60,555,348 56,337,289
Deferred Income - 6,581,743
Lease Liabilities $ 4,815,512 4,811,991
Gold Stream Liability $ 9,979,413 10,187,630
Loan and other borrowings $ 11,790,796 888,141
$ 87,141,069 78,806,794
less: Current Liabilities contingent upon future gold sales $ (10,785,214) (12,403,215)
Working Capital Deficit $ (38,308,404) (29,116,915)
Inventory
Gold inventory is recognised in the ore stockpiles and in production
inventory, comprised principally of ore stockpile and doré at site or in
transit to the refinery, with a component of gold-in-circuit.
Table 4.2: Inventory
March 31 2023 December 31 2022
Plant spares and consumables $ 9,146,279 4,751,922
Gold ore in stockpile $ 12,479,805 11,869,168
Gold in circuit $ 3,454,724 1,160,237
Gold dore $ - 2,119,935
$ 25,080,808 19,901,262
Liquidity and Capital Resources
The Group has generated positive operating cash flow during Q1 2023 and
expects to continue to do so based on its production and AISC guidance. This
operating cash flow will support debt repayments, regional exploration and
underground expansion drilling at Segilola, planned capital expenditures and
corporate overhead costs.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Group's financial instruments are classified as follows:
March 31, 2023 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 4,505,071 - 4,505,071
Amounts receivable 240,009 - 240,009
Total assets $ 4,745,080 - 4,745,080
Liabilities
Accounts payable and accrued liabilities $ 59,749,547 805,801 60,555,348
Loans and borrowings 27,982,480 - 27,982,480
Gold stream liability - 23,507,987 23,507,987
Lease liabilities 14,465,191 - 14,465,191
Total liabilities $ 102,197,218 24,313,788 126,511,006
December 31, 2022 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
Total assets $ 6,908,479 - 6,908,479
Liabilities
Accounts payable and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
Total liabilities $ 97,673,643 27,255,350 124,928,993
The fair value of these financial instruments approximates their carrying
value.
As noted above, the Group has certain financial liabilities that are held at
fair value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
As at March 31, 2023 and December 31, 2022, all the Group`s liabilities
measured at fair value through profit and loss are categorized as Level 3 and
their fair value was determined using discounted cash flow valuation models,
taking into account assumptions with respect to gold prices and discount rates
as well as estimates with respect to production and operating results for the
Segilola mine.
DISCLOSURE OF OUTSTANDING SHARE DATA
As at the date of this MD&A, there were 644,696,185 common shares issued
and outstanding stock options to purchase a total of 26,901,000 common shares.
Authorized Common Shares
Table 5.1: Common shares issued
March 31, 2023 December 31, 2022
Common shares issued 644,696,185 644,696,185
Warrants
There were no warrants that were outstanding at March 31, 2023, and as at the
date of this report.
During the quarter ended March 31, 2023, no warrants were issued.
Stock Options
The number of stock options that were outstanding and the remaining
contractual lives of the options at March 31, 2023, were as follows.
Table 5.2: Options outstanding
Exercise Price Number Weighted Average Remaining Contractual Life Expiry Date
Outstanding
C$0.145 12,111,000 0.21 June 15, 2023
C$0.140 750,000 0.52 October 5, 2023
C$0.200 14,040,000 1.80 January 16, 2025
Total 26,901,000
The Company has granted employees, consultants, directors and officers share
purchase options. These options were granted pursuant to the Company's stock
option plan.
No options were issued during the three months period ended March 31, 2023 and
year ended December 31, 2022.
A total of 9,250,000 options were exercised at a price of C$0.12 each and
689,000 at a price of C$0.145 during the year ended December 31, 2022.
Under the Company's Omnibus Incentive Plan approved by shareholder on December
17, 2021, 44,900,000 common shares of the Company are reserved for issuance
upon exercise of options or other securities.
During the year ended December 31, 2022, 2,399,176 Restricted Share Units
("RSUs") were granted to members of Executive Management under the Company's
Long Term Incentive Plan ("LTIP").
In March 2023, the Board considered that it was subject to a share trading
restriction. As a result, the Board resolved to extend the expiry date of
12,111,000 shares with an exercise price of C$0.145 past the original expiry
date of March 12, 2023 up until June 15, 2023.
Condensed Interim Consolidated Financial Statements
For the Three Months Ended March 31, 2023, and 2022
(in United States Dollars)
THOR EXPLORATIONS LTD.
March 31, 2023
(Unaudited)
Table of contents
Condensed interim consolidated statements of financial
position........................................................ 4
Condensed interim consolidated statements of comprehensive
income............................................... 5
Condensed interim consolidated statements of cash
flows.................................................................. 6
Condensed interim consolidated statements of changes in
equity........................................................ 7
Notes to the condensed interim consolidated financial
statements.................................................. 8-30
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an
auditor has not performed a review of the condensed interim consolidated
financial statements, they must be accompanied by a notice indicating that the
financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim consolidated financial statements
of the Company have been prepared by and are the responsibility of the
Company's management.
The Company's independent auditor has not performed a review of these
financial statements in accordance with standards established by the Canadian
Institute of Chartered Accountants for a review of condensed interim
consolidated financial statements by an entity's auditor.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In United States dollars (unaudited)
March 31, December 31, March 31,
Note 2023 2022 2022
$ $ $
(restated)
ASSETS
Current assets
Cash 4,505,071 6,688,037 6,276,376
Inventory 4 25,080,808 19,901,262 16,534,943
Amounts receivable 5 240,009 220,442 191,876
Prepaid expenses, advances and deposits 6 8,221,563 10,476,923 918,219
Total current assets 38,047,451 37,286,664 23,921,414
Non-current assets
Deferred income tax assets 89,061 87,797 84,794
Prepaid expenses, advances and deposits 6 244,331 282,825 103,790
Right-of-use assets 7 15,667,650 16,849,402 19,707,915
Property, plant and equipment 12 148,063,401 149,513,917 149,421,654
Intangible assets 13 20,718,491 19,231,208 15,773,637
Total non-current assets 184,782,934 185,965,149 185,091,790
TOTAL ASSETS 222,830,385 223,251,813 209,013,204
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 14 60,555,348 56,337,289 31,834,095
Deferred income - 6,581,743 6,233,347
Lease liabilities 7 4,815,512 4,811,991 4,854,714
Gold stream liability 8 9,979,413 10,187,630 12,889,957
Loans and borrowings 9 11,790,796 888,141 28,441,348
Total current liabilities 87,141,069 78,806,794 84,253,461
Non-current liabilities
Accounts payable and accrued liabilities 14 - - 1,031,309
Lease liabilities 7 9,649,679 10,597,294 12,587,430
Gold stream liability 8 13,528,574 14,852,135 16,860,524
Loans and borrowings 9 16,191,684 27,254,513 25,733,198
Provisions 11 4,971,736 4,959,638 5,341,369
Total non-current liabilities 44,341,673 57,663,580 61,553,830
SHAREHOLDERS' EQUITY
Common shares 15 80,439,693 80,439,693 79,949,297
Option reserve 15 3,351,133 3,351,133 3,455,454
Currency translation reserve 15 (2,278,054) (2,512,911) (3,690,038)
Retained earnings/(deficit) 15 9,834,871 5,503,524 (16,508,800)
Total shareholders' equity 91,347,643 86,781,439 63,205,913
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 222,830,385 223,251,813 209,013,204
These condensed interim consolidated financial statements were approved for
issue by the
Board of Directors on May 29, 2023, and are signed on its behalf by:
(Signed) "Adrian Coates" (Signed) "Olusegun Lawson"
Director Director
The accompanying notes are an integral part of these condensed interim
consolidated financial statements.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31,
In United States dollars (unaudited)
2023 2022
Note $ $
Continuing operations (restated)
Revenue 3 40,287,830 24,865,482
Production costs 3 (18,306,502) (8,219,530)
Transportation and refining 3 (342,291) (502,222)
Royalties 3 (768,282) (550,765)
Amortization and depreciation of operational assets - owned assets 3 (6,893,372) (4,732,780)
Amortization and depreciation of operational assets - right of use assets 3 (1,159,537) (1,158,255)
Cost of sales (27,469,984) (15,163,552)
Loss on forward sale of commodity contracts (750,482) (294,922)
Gross profit from operations 12,067,364 9,407,008
Amortization and depreciation - owned assets 3 (272,151) (271,837)
Amortization and depreciation - right of use assets 3 (35,050) -
Other administration expenses 3 (4,054,939) (1,883,401)
Impairment of Exploration & Evaluation assets 13 (3,096) (2,701)
Profit from operations 7,702,128 7,249,069
Interest expense (3,370,781) (3,758,131)
Net profit before income taxes 4,331,347 3,490,938
Income Tax - -
Net profit for the period 4,331,347 3,490,938
Attributable to:
Equity shareholders of the Company 4,331,347 3,490,938
Net profit for the period 4,331,347 3,490,938
Other comprehensive profit
Foreign currency translation profit (loss) attributed to 234,857 (800,528)
equity shareholders of the company
Total comprehensive income profit for the period 4,566,204 2,690,410
Net profit per share
Basic 16 $ 0.007 $ 0.005
Diluted 16 $ 0.007 $ 0.005
The accompanying notes are an integral part of these condensed interim
consolidated financial statements
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
In United States dollars (unaudited)
Note 2023 2022
(restated)
Cash flows from/(used in):
Operating
Net profit $ 4,331,347 3,490,938
Adjustments for:
Impairment of unproven mineral interest 13 3,096 2,701
Amortization and depreciation 3 8,360,110 5,004,617
Loss on forward sale commodity contracts 750,482 294,923
Unrealized Foreign exchange (gains)/losses 3 (3,800,994) 865,075
Interest expense 3,370,781 3,752,766
13,014,822 13,411,020
Changes in non-cash working capital accounts
Inventory (5,179,546) 41,150
Receivables (19,567) (340,269)
Current prepaid expenses, advances and deposits 2,223,366 -
Non-current prepaid expenses, advances and deposits 38,494 -
Accounts payable and accrued liabilities 15,718,522 (5,663,278)
Deferred income (6,581,743) 6,204,508
Net cash flows from operating activities 19,214,348 13,653,131
Investing
Restricted cash - 3,495,992
Purchase of intangible assets 13 (6,733) (169)
Assets under construction expenditures 12 - -
Property, Plant & Equipment 12 (14,453,933) (10,556,466)
Exploration & Evaluation assets expenditures 13 (1,054,802) (1,022,773)
Net cash flows used in investing activities (15,515,468) (8,083,416)
Financing
Share subscriptions received 15 - 919,162
(Repayment of) / Proceeds from loans and borrowings 10 (3,533,772) (230,446)
Arrangement fees paid (126,874) -
Interest paid 10 (1,059,954) (1,214,587)
Payment of lease liabilities 7 (1,255,729) (1,213,678)
Net cash flows (used in)/from financing activities (5,976,329) (1,739,549)
Effect of exchange rates on cash 94,483 1,169,940
Net change in cash $ (2,182,966) 5,000,106
Cash, beginning of the period $ 6,688,037 1,276,270
Cash, end of the period $ 4,505,071 6,276,376
The accompanying notes are an integral part of these condensed interim
consolidated financial statements
.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
In United States dollars (unaudited)
Note Common shares Option reserve Currency translation reserve (Deficit)/ Retained earnings Total shareholders' equity
Balance on December 31, 2021 $ 79,027,183 $ 4,513,900 $ (2,889,510) $ (21,058,184) $ 59,593,389
Net profit for the period - - - 3,490,938 3,490,938
Other comprehensive loss - - (800,528) - (800,528)
Total comprehensive profit for the period - - (800,528) 3,490,938 2,690,410
Options exercised 19 922,114 (1,058,446) - 1,058,446 922,114
Balance on March 31, 2022 (restated) $ 79,949,297 $ 3,455,454 $ (3,690,038) $ (16,508,800) $ 63,205,913
Balance on December 31, 2022 $ 80,439,693 $ 3,351,133 $ (2,512,911) $ 5,503,524 $ 86,781,439
Net profit for the period - - - 4,331,347 4,331,347
Other comprehensive income - - 234,857 - 234,857
Total comprehensive profit for the period - - 234,857 4,331,347 4,566,204
Balance on March 31, 2023 $ 80,439,693 $ 3,351,133 $ (2,278,054) $ 9,834,871 $ 91,347,643
The accompanying notes are an integral part of these condensed interim
consolidated financial statements.
1. CORPORATE INFORMATION
Thor Explorations Ltd. (the "Company"), together with its subsidiaries
(collectively, "Thor" or the "Group") is a West African focused gold producer
and explorer, dually listed on the TSX-Venture Exchange (THX.V) and AIM Market
of the London Stock Exchange (THX.L).
The Company was formed in 1968 and is organized under the Business
Corporations Act (https://www.lawinsider.com/clause/business-corporations-act)
(British Columbia (https://www.lawinsider.com/clause/british-columbia) )
(BCBCA) with its registered office at 550 Burrard St, Suite 2900 Vancouver,
BC, CA, V6C 0A3. The Company evolved into its current form in August 2011
following a reverse takeover and completed the transformational acquisition of
its flagship Segilola Gold Project in Nigeria in August 2016.
2. BASIS OF PREPARATION
a) Statement of compliance
These condensed interim consolidated financial statements ("interim financial
statements") have been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting, of International Financial Reporting
Standards as issued by the International Accounting Standards Board ("IFRS").
These interim financial statements should be read in conjunction with the
audited consolidated financial statements for the year ended December 31,
2022, which have been prepared in accordance with IFRS.
These interim financial statements were authorized for issue by the Board of
Directors on May 29, 2023.
b) Basis of measurement
These interim financial statements are presented in United States dollars
("US$").
These interim financial statements have been prepared on a historical cost
basis, except for certain financial instruments that are measured at fair
value at the end of each reporting period.
The Group's accounting policies have been applied consistently to all periods
in the preparation of these interim financial statements. In preparing the
Group 's interim financial statements for the three months ended March 31,
2023, the Group applied the critical judgments and estimates as disclosed in
note 3 of its annual financial statements for the year ended December 31,
2022.
These interim financial statements include the accounts of the Company and its
subsidiaries. Subsidiaries are entities controlled by the Company, which is
defined as having the power over the entity, rights to variable returns from
its involvement with the entity, and the ability to use its power to affect
the amount of returns. All intercompany transactions and balances are
eliminated on consolidation. The Company's subsidiaries at March 31, 2023 are
consistent with the subsidiaries as at December 31, 2022 as disclosed in note
3 to the annual financial statements.
None of the new standards or amendments to standards and interpretations
applicable during the period has had a material impact on the financial
position or performance of the Group. The Group has not early adopted any
standard, interpretation or amendment that was issued but is not yet
effective.
c) Nature of operations and going concern
The Board of Directors have performed an assessment of whether the Company and
Group would be able to continue as a going concern until at least May 2024. In
their assessment, the Group has taken into account its financial position,
expected future trading performance, its debt and other available credit
facilities, future debt servicing requirements, its working capital and
capital expenditure commitments and forecasts.
At March 31, 2023, the Group had a cash position of $4.5 million and a net
debt position of $24.9 million, calculated as total debt adjusted for
unamortized deferred financing charges less cash and cash equivalents and
short-term investments. Cash flows from operating activities for the three
months ended March 31, 2023 were inflows of $19.2 million.
The Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for at least the next twelve
months and that, as at the date of this report, there are no material
uncertainties regarding going concern
The Board of Directors is satisfied that the going concern basis of accounting
is an appropriate assumption to adopt in the preparation of the interim
financial statements as at, and for the period ended March 31, 2023.
3. PROFIT FROM OPERATIONS
3a. REVENUE
Three Months Ended
March 31,
2023 2022
Gold revenue 40,244,057 24,849,962
Silver revenue 43,773 15,520
$ 40,287,830 $ 24,865,482
The Group`s revenue is generated in Nigeria. All sales are made to the Group`s
only customer.
3b. COST OF SALES
Three Months Ended
March 31,
2023 2022
Mining 20,037,387 7,698,414
Processing 4,108,785 926,517
Support services and others 1,405,062 1,778,410
Foreign exchange (gains)/losses on production costs* (7,244,732) (2,183,811)
Production costs $ 18,306,502 $ 8,219,530
Transportation and refining 342,291 502,222
Royalties 768,282 550,765
Amortization and depreciation - operational assets - owned assets 6,893,372 4,732,780
Amortization and depreciation - operational assets - right of use assets 1,159,537 1,158,255
Cost of sales 27,469,984 15,163,552
(* The total foreign exchange gain for the current period was $7,244,732,
which comprises of realized foreign exchange gains of $3,443,738 and
unrealized foreign exchange gains of $3,800,994. During the period, SROL
purchased its local currency on a spot basis. The foreign exchange gains and
losses from these trades are generated from the differences between the local
currency values achieved on the trades versus the currency translation rate at
the time of the trade.)
3c. AMORTISATION AND DEPRECIATION
Three Months Ended
March 31,
2023 2022
Amortization and depreciation - operational assets - owned assets 6,893,372 4,732,780
Amortization and depreciation - operational assets - right of use assets 1,159,537 1,158,255
Amortization and depreciation - owned assets 272,151 271,837
Amortization and depreciation - right-of-use assets 35,050 -
$ 8,360,110 $ 6,162,872
3d. OTHER ADMINISTRATION EXPENSES
Three Months Ended
March 31,
Note 2023 2022
Audit and legal 150,806 47,173
Bank charges 93,476 29,974
Consulting fees 503,400 324,354
Directors' fees 17 137,472 90,328
Investor relations and transfer agent 126,887 111,226
Listing and filing fees 12,186 5,556
Camp costs 1,356,729 418,047
Office and miscellaneous 765,226 364,203
Salaries and benefits 693,299 325,986
Travel 215,458 166,554
$ 4,054,939 $ 1,883,401
4. INVENTORY
March 31, 2023 December 31, 2022
Plant spares and consumables $ 9,146,279 $ 4,751,922
Gold ore in stockpile 12,479,805 11,869,168
Gold in CIL 3,454,724 1,614,267
Gold Dore - 2,119,935
$ 25,080,808 $ 19,901,262
There were no write downs to reduce the carrying value of inventories to net
realizable value during the periods ended March 31, 2023 and 2022.
5. AMOUNTS RECEIVABLE
March 31, 2023 December 31, 2022
Accounts receivable $ 60,569 $ 67,084
GST 1,673 993
Other receivables 177,767 152,365
$ 240,009 $ 220,442
The value of receivables recorded on the balance sheet is approximate to their
recoverable value and there are no expected material credit losses.
6. PREPAID EXPENSES, ADVANCES AND DEPOSITS
March 31, December 31, 2022
2023
Current:
Gold Stream liability arrangement fees 33,186 33,186
Advance deposits to vendors 163,012 9,625,204
Other prepayments 8,025,365 818,533
$ 8,221,563 10,476,923
Non-current:
Gold Stream liability arrangement fees - 74,667
Other prepayments 244,331 208,158
$ 244,331 282,825
Included in Advance deposits to vendors, are payment deposits towards key
equipment, materials and spare parts, with longer lead times to delivery,
which are of critical importance to maintain efficient operations of the mine
and process plant. These were made to mitigate against price volatility and
inflation currently affecting the sector.
7. LEASES
The Group accounts for leases in accordance with IFRS 16. The definition of a
lease under IFRS 16 was applied only to contracts entered into or changed on
or after January 1, 2019. The Group has elected not to recognize right-of-use
assets and lease liabilities for leases which have low value, or short-term
leases with a duration of 12 months or less. The payments associated with such
leases are charged directly to the income statement on a straight-line basis
over the lease term. There were no such leases for the periods ended March 31,
2023 and 2022.
Leases relate principally to corporate offices and the mining fleet at the
Segilola mine. Corporate offices are depreciated over 5 years and mining fleet
over the life of mine of Segilola.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position for the period ended March 31, 2023, were as follows:
Right of use asset Lease liability Income statement
Carrying value December 31, 2022 $ 16,849,402 $ (15,409,285) $
New leases entered in to during the period - - -
Depreciation (1,194,587) - (1,194,587)
Interest - (298,438) (298,438)
Lease payments - 1,255,729 -
Foreign exchange movement 12,835 (13,197) (13,197)
Carrying value at March 31, 2023 $ 15,667,650 $ (14,465,191) $ (1,506,222)
Current liability (4,815,512)
Non-current liability (9,649,679)
The key impacts on the Statement of Comprehensive Loss and the Statement of
Financial Position for the year ended December 31, 2022, were as follows:
Right of use asset Lease liability Income statement
Carrying value December 31, 2021 $ 20,843,612 $ (18,274,374) $ -
New leases entered in to during the period 660,064 (660,064) -
Depreciation (4,724,100) - (4,724,100)
Interest - (1,052,329) (1,052,329)
Lease payments - 4,882,786 -
Foreign exchange movement 69,826 (305,304) (305,304)
Carrying value at December 31, 2022 $ 16,849,402 $ (15,409,285) $ (6,081,733)
Current liability (4,811,991)
Non-current liability (10,597,294)
8. GOLD STREAM LIABILITY
Gold stream liability
March 31, 2023 December 31, 2022
Balance at Beginning of period $ 25,039,765 $ 30,262,279
Repayments (2,940,730) (11,534,441)
Interest at the effective interest rate 1,408,952 6,311,927
Balance at End of period $ 23,507,987 $ 25,039,765
Current liability 9,979,413 10,187,630
Non-current liability 13,528,574 14,852,135
On April 29, 2020, the Group announced the closing of project financing for
its flagship Segilola Gold Project ("Segilola") in Osun State, Nigeria. The
financing included a $21 million gold stream upfront deposit ("the
Prepayment") over future gold production at Segilola under the terms of a Gold
Purchase and Sale Agreement ("GSA") entered into between the Group's wholly
owned subsidiary SROL and the AFC. The Prepayment is secured over the shares
in SROL as well as over SROL's assets and is not subject to interest. The
initial term of the GSA is for ten years with an automatic extension of a
further ten years. The AFC will receive 10.27% of gold production from the
Segilola ML41 mining license until the $21 million Prepayment has been repaid
in full. Thereafter, the AFC will continue to receive 10.27% of gold
production from material mined within the ML41 mining license until a further
$26.25 million is received, representing a total money multiple of 2.25 times
the value of the Prepayment, at which point the GSA will terminate. The AFC
are not entitled to receive an allocation of gold production from material
mined from any of the Group's other gold tenements under the terms of the GSA.
The $26.25 million represented interest on the Prepayment. A calculation of
the implied interest rate was made as at drawdown date with interest being
apportioned over the expected life of the Stream Facility. The principal input
variables used in calculating the implied interest rate and repayment profile
were the production profile and gold price. The future gold price estimates
were based on market forecast reports for the years 2021 to 2025 and, the
production profile was based on the latest life of mine plan model. The
liability was to be re-estimated on a periodic basis to include changes to the
production profile, any extension to the life of mine plan and movement in the
gold price. Upon commencement of production, any change to the implied
interest rate will be expensed through the Condensed Interim Consolidated
Statement of Income (Loss).
In December 2021, the Group entered into a cash settlement agreement with the
AFC where the gold sold to the AFC is settled in a net-cash sum payable to the
AFC instead of delivery of bullion in repayment of the gold stream
arrangement.
The following table represents the Group's loans and borrowings measured and
recognised at fair value.
Level 1 Level 2 Level 3 Total
Financial liability at fair value through profit or loss $ - - 23,507,987 23,507,987
The liabilities included in the above table are carried at fair value through
profit and loss.
9. LOANS AND BORROWINGS
March 31, December 31, 2022
2023
Current liabilities:
Loans payable to the Africa Finance Corporation less than 1 year $ 10,828,365 $ 356,155
Deferred element of EPC contract 962,431 531,986
$ 11,790,796 888,141
Non-current liabilities:
Loans payable to the Africa Finance Corporation more than 1 year $ 13,429,381 $ 24,103,784
Deferred element of EPC contract 2,762,303 3,150,729
$ 16,191,684 $ 27,254,513
Loans from the Africa Finance Corporation
March 31, December 31, 2022
2023
Balance at Beginning of period $ 24,459,939 $ 46,859,966
Drawdown - -
Principal repayments (526,538) (24,220,764)
Arrangement fees (126,874) -
Interest paid (986,800) (4,645,014)
Unwinding of interest in the period 1,438,019 6,465,751
Foreign exchange movement - -
Balance at End of period $ 24,257,746 $ 24,459,939
Current liability 10,828,365 356,155
Non-current liability 13,429,381 24,103,784
On December 1, 2020, the Group announced that its subsidiary Segilola
Resources Operating Limited ("SROL") had completed the financial closing of a
$54 million project finance senior debt facility ("the Facility") from the
Africa Finance Corporation ("AFC") for the construction of the Segilola Gold
Project in Nigeria. The Facility could be drawn down at the Group's request in
minimum disbursements of $5 million. As at December 31, 2022, SROL has
received total disbursements of $52.6 million (2021: $52.6 million), with $nil
drawn down in 2022 (2021: $31.2 million) and the remaining $1.35m undrawn
facility cancelled by the Group during the period under review (2021: $nil).
Total disbursements received represent 97% of the Facility. The Facility is
secured over the share capital of SROL and its assets, with repayments
commencing in March 2022 and to conclude in March 2025.
Repayment of the aggregate Facility will be made in instalments over a
36-month period by repaying an amount on a series of repayment dates, as set
out in the Facility Agreement, which reduces the amount of the outstanding
aggregate Facility by the amount equal to the relevant percentage of Loans
borrowed as at the close of business in London on the date of Financial Close.
Interest accrues at SOFR plus 9% and is payable on a quarterly basis in
arrears.
In conjunction with the granting of the Facility, Thor issued 33,329,480 bonus
shares to the AFC. Thor also incurred transaction costs of $4,663,652 in
relation to the loan facility. The fair value of the liability at inception
was determined at $45,822,943 taking into account the transaction costs and
equity component and recognized at amortized cost using an effective rate of
interest, with the fair value of the shares issued in April 2020 of $5,666,011
recognized within equity.
On 31 January 2023, the Group entered into an agreement with the AFC amending
the terms of its senior debt facility.
The amended facility removes the project finance cash sweep requirement and
allows for free distributions from SROL (subject to a 20% distribution sweep
to the senior debt facility), as well as releasing the Group from restrictions
regarding acquisitions, distribution of dividends and certain indebtedness
covenants. The payment timetable was also re-scheduled to reallocate a higher
percentage of the repayments to a later period in the Facility's term.
Deferred payment facility on EPC contract for the construction of the Segilola
Gold Mine
The Group has constructed its Segilola Gold Mine through an engineering,
procurement, and construction contract ("EPC Contract"). The EPC Contract has
been agreed on a lump sum turnkey basis which provides Thor with a fixed price
of $67.5 million for the full delivery of design, engineering, procurement,
construction, and commissioning of the proposed 715,000 ton per annum gold ore
processing plant.
The EPC Contract includes a deferred element ("the Deferred Payment Facility")
of 10% of the fixed price. As at March 31, 2023, a total of $2,762,303
(December 31, 2022: $3,682,715) was deferred under the facility. The 10%
deferred element is repayable in instalments over a 36-month period by
repaying an amount on a series of repayment dates, as set out in the Deferred
Payment Facility. Repayments commenced in March 2022 and will conclude in
2025. Interest on this element of the EPC deferred facility accrues at 8% per
annum from the time the Facility taking-over Certificate was issued.
March 31, December 31, 2022
2023
Balance at beginning of period $ 3,682,715 $ 6,210,090
Offset against EPC payment - 440,263
Principal repayments (66,504) (3,440,449)
Interest paid (73,154) -
Unwinding of interest in the period 181,677 472,811
Balance period end $ 3,724,734 $ 3,682,715
Current liability 962,431 531,986
Non-current liability 2,762,303 3,150,729
10. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
March 31, 2023 Gold stream liability AFC loan EPC deferred facility Total
January 1, 2023 $ 25,039,765 24,459,939 3,682,715 53,182,419
Cash flows:
(Repayment of) / Proceeds from loans and borrowings (2,940,730) (526,538) (66,504) (3,533,772)
Arrangement fees - (126,874) - (126,874)
Interest paid - (986,800) (73,154) (1,059,954)
Non-cash changes:
Unwinding of interest in the year 1,408,952 1,438,019 181,677 3,028,648
March 31, 2023 $ 23,507,987 24,257,746 3,724,734 51,490,467
December 31, 2022 Gold stream liability Short term advance AFC loan EPC deferred facility Total
January 1, 2022 $ 30,262,279 668,570 46,859,966 6,210,090 84,000,905
Cash flows:
(Repayment of) / Proceeds from loans and borrowings (11,534,441) (668,570) (24,220,764) (3,440,449) (39,864,224)
Interest paid - - (4,645,014) - (4,645,014)
Non-cash changes:
Unwinding of interest in the year 6,311,927 - 6,465,751 472,811 13,250,489
Offset against EPC payment - - - 440,263 440,263
December 31, 2022 $ 25,039,765 - 24,459,939 3,682,715 53,182,419
11. PROVISIONS
March 31, 2023 Fleet demobilization costs
Restoration costs
Other Total
Balance at Beginning of period $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
Initial recognition of provision - - - -
Changes in estimates - -
Unwinding of discount - - 11,701 11,701
Foreign exchange movements 397 - - 397
Balance at period end $ 18,554 $ 173,442 $ 4,779,740 $ 4,971,736
Current liability - - - -
Non-current liability 18,554 173,442 4,779,740 4,971,736
December 31, 2022 Fleet demobilization costs
Restoration costs
Other Total
Balance at Beginning of period $ - $ 173,241 $ 5,064,935 $ 5,238,176
Initial recognition of provision 18,415 - - 18,415
Changes in estimates - - (404,859) (404,859)
Unwinding of discount - 201 107,963 108,164
Foreign exchange movements (258) - - (258)
Balance at period end $ 18,157 $ 173,442 $ 4,768,039 $ 4,959,638
Current liability - - - -
Non-current liability 18,157 173,442 4,768,039 4,959,638
The restoration costs provision is for the site restoration at Segilola Gold
Project in Osun State Nigeria. The value of the above provision is measured by
unwinding the discount on expected future cash flows using a discount factor
that reflects the credit-adjusted risk-free rate of interest. It is expected
that the restoration costs will be paid in US dollars, and as such US forecast
inflation rates of 2.9% and the interest rate of 4% on 5-year US bonds were
used to calculate the expected future cash flows, which are in line with the
life of mine. The provision represents the net present value of the best
estimate of the expenditure required to settle the obligation to rehabilitate
environmental disturbances caused by mining operations at mine closure.
The fleet demobilization costs provision is the value of the cost to
demobilize the mining fleet upon closure of the mine.
12. PROPERTY, PLANT AND EQUIPMENT
A summary of depreciation capitalized is as follows:
Three months ended March 31, Total depreciation
Capitalized
December 31, 2022 December 31, 2022
2022 2021
Exploration expenditures 55,718 23,418 676,070 620,352
Total $ 55,718 $ 23,418 $ 676,070 $ 620,352
a) Segilola Project, Osun Nigeria:
Classification of Expenditure on the Segilola Gold Project
On January 1, 2022, the Group achieved Commercial Production at the Segilola
Gold Project in Nigeria ("the Project") Upon achieving Commercial Production,
the Assets under Construction was reclassified within Property, Plant and
Equipment, and transferred to Mining Asset, Processing Plant and
Decommissioning Asset.
Decommissioning Asset
The decommissioning asset relates to estimated restoration costs at the
Group's Segilola Gold Mine as at March 31, 2023. Refer to Note 11 for further
detail.
EPC payments
During the three-month period ended March 31, 2023, the Group paid $8,732,752
(December 31, 2022: $4,321,856) to the EPC contractor in relation to the
construction of the Segilola Mine and processing plant.
13. INTANGIBLE ASSETS
The Group's exploration and evaluation assets costs are as follows:
Douta Gold Project, Senegal Central Houndé Project, Burkina Faso Exploration licenses, Nigeria Software Total
Balance, December 31, 2021 $14,219,982 $ - $ 895,301 $230,136 $15,345,419
Acquisition costs - - 24,103 - 24,103
Exploration costs 3,745,803 12,014 1,693,863 - 5,451,680
Additions - - - 43,599 43,599
Amortisation - - - (122,988) (122,988)
Impairment - (12,014) - - (12,014)
Foreign exchange movement (1,427,912) - (70,679) - (1,498,591)
Balance, December 31, 2022 $16,537,873 $ - $ 2,542,588 $150,747 $19,231,208
Acquisition costs - - - - -
Exploration costs 749,926 3,096 348,301 - 1,101,323
Additions - - - 6,733 6,733
Amortisation - - - (28,561) (28,561)
Impairment - (3,096) - - (3,096)
Foreign exchange movement 263,121 - 147,763 - 410,884
Balance, March 31, 2023 $17,550,920 $ - $ 3,038,652 $128,919 $20,718,491
a) Douta Gold Project, Senegal:
The Douta Gold Project consists of an early-stage gold exploration license
located in southeastern Senegal, approximately 700km east of the capital city
Dakar.
The Group is party to an option agreement (the "Option Agreement") with
International Mining Company ("IMC"), by which the Group has acquired a 70%
interest in the Douta Gold Project located in southeast Senegal held through
African Star SARL.
Pursuant to the terms of the Option Agreement, IMC's 30% interest will be a
"free carry" interest until such time as the Group announces probable reserves
on the Douta Gold Project (the "Free Carry Period"). Following the Free Carry
Period, IMC must either elect to sell its 30% interest to African Star at a
purchase price determined by an independent valuer commissioned by African
Star or fund its 30% share of the exploration and operating expenses.
b) Central Houndé Project, Burkina Faso:
(i) Bongui and Legue gold permits, Burkina Faso:
AFC Constelor SARL holds a 100% interest in the Bongui and Legue gold permits
covering an area of approximately 233 km(2) located within the Houndé belt,
260 km southwest of the capital Ouagadougou, in western Burkina Faso.
(ii) Ouere Permit, Central Houndé Project, Burkina Faso:
Argento BF SARL holds a 100% interest in the Ouere gold permit, covering an
area of approximately 241 km(2) located within the Houndé belt.
The three permits together cover a total area of 474km(2) over the Houndé
Belt which form the Central Houndé Project.
The Group carried out an impairment assessment of the Central Houndé Project
at December 31, 2020, and a decision was taken to fully impair the value of
the Central Houndé Project. It is the Group's intention to focus on Segilola
development and Douta exploration in the short term, and it does not plan to
undertake significant work on the license areas in the near future.
c) Exploration Licenses, Nigeria
The high grade Segilola gold deposit is located on the major regional shear
zone that extends for several hundred kilometers through the gold-bearing
Ilesha schist belt (structural corridor) of Nigeria. The Group's gold
exploration tenure currently comprises 16 wholly owned exploration licenses
and nine joint venture partnership exploration licenses. Together with the
mining lease over the Segilola Gold Deposit, Thor's total gold exploration
tenure amounts to 1,542 km². The Group's exploration strategy includes
further expansion of its Nigerian land package as and when attractive new
licenses become available.
14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
March 31, December 31,
2023 2022
Trade payables $ 51,912,663 $ 46,914,333
Accrued liabilities 6,273,782 6,213,977
Other payables 2,368,903 3,208,979
$ 60,555,348 $ 56,337,289
Current liability 60,555,348 56,337,289
Non-current liability - -
Accounts payable and accrued liabilities are classified as financial
liabilities and approximate their fair values.
Included in trade payables is a balance of $1,463,353 due to our EPC
contractor (December 31, 2022: $10,196,105). The total EPC amount has been
finalized with our EPC contractor, and this balance has been paid at the date
of release of these interim financial statements.
Also included in trade payables is a total of $805,801 (2021: $$2,215,585)
that relates to third party royalties that will become payable upon future
gold sales. All these royalties' creditors are included in current
liabilities.
The following table represents the Group's trade payables measured and
recognized at fair value.
Level 1 Level 2 Level 3 Total
Trade payables $ - - 805,801 805,801
Third party royalties
15. CAPITAL AND RESERVES
a) Authorized
Unlimited common shares without par value.
b) Issued
March 31, March 31, December 31, December 31,
2023 2023 2022 2022
Number Number
As at start of the year 644,696,185 $ 80,439,693 632,358,009 $ 79,027,183
Issue of new shares:
- Share options exercised i - - 9,939,000 960,546
- RSU awards vested ii - - 2,399,176 451,964
644,696,185 $ 80,439,693 644,696,185 $ 80,439,693
i Value of 9,250,000 options exercised at a price of CAD$0.12 per share and
289,000 options exercised at a price of CAD$0.145 per share, both on January
19, 2022, and 400,000 options exercised at a price of CAD$0.145 per share on
December 13, 2022.
ii Value of 2,399,176 RSU awards that were granted and vested on October 11,
2022, at a deemed price of CAD$0.26 per share.
c) Share-based compensation
Stock option plan
The Group has granted directors, officers and consultants share purchase
options. These options were granted pursuant to the Group's stock option plan.
Under the current Share Option Plan, 44,900,000 common shares of the Group are
reserved for issuance upon exercise of options.
· On January 16, 2020, 14,250,000 stock options were granted at an
exercise price of C$0.20 per share for a period of five years. The options
vested immediately.
· On October 5, 2018, 750,000 stock options were granted at an
exercise price of C$0.14 per share for a period of five years.
· On March 12, 2018, 12,800,000 stock options were granted at an
exercise price of C$0.145 per share for a period of five years. 689,000 of
these stock options were exercised during 2022.
All of the stock options were vested as at the balance sheet date. These
options did not contain any market conditions and the fair value of the
options were charged to the statement of comprehensive loss or capitalized as
to assets under construction in the period where granted to personnel's whose
cost is capitalized on the same basis. The assumptions inherent in the use of
these models are as follows:
Vesting period First vesting date Expected remaining life (years) Risk free rate Exercise price Volatility of share price Fair value Options vested Options granted Expiry
(years)
5 12/03/2018 0.21 2.00% $ 0.145 105.09% $0.14 12,111,000 12,111,000 15/06/2023
5 05/10/2018 0.52 2.43% $ 0.14 100.69% $0.14 750,000 750,000 05/10/2023
5 16/01/2020 1.80 1.49% $ 0.20 66.84% $0.07 14,250,000 14,250,000 16/01/2025
In Canadian Dollars
The Group has elected to measure volatility by calculating the average
volatility of a collection of three peer companies' historical share prices
for the exercising period of each parcel of options. Management believes that
given the transformational change that the Group has undergone since the
acquisition of the Segilola Gold Project in August 2016, the Group's
historical share price is not reflective of the current stage of development
of the Group, and that adopting the volatility of peer companies who have
advanced from exploration to development is a more accurate measure of share
price volatility for the purpose of options valuation.
The following is a summary of changes in options from January 1, 2023, to
March 31, 2023, and the outstanding and exercisable options at March 31, 2023:
In Canadian Dollars
The following is a summary of changes in options from January 1, 2022, to
December 31, 2022, and the outstanding and exercisable options at December 31,
2022:
In Canadian Dollars
d) Nature and purpose of equity and reserves
The reserves recorded in equity on the Group's statement of financial position
include 'Reserves,' 'Currency translation reserve,' 'Retained earnings' and
'Deficit.'
'Option reserve' is used to recognize the value of stock option grants prior
to exercise or forfeiture.
'Currency translation reserve' is used to recognize the exchange differences
arising on translation of the assets and liabilities of foreign branches and
subsidiaries with functional currencies other than US dollars.
'Deficit' is used to record the Group's accumulated deficit.
'Retained earnings' is used to record the Group's accumulated earnings.
16. EARNINGS PER SHARE
Diluted net earnings per share was calculated based on the following:
March 31, March 31,
2023 2022
Basic weighted average number of shares outstanding 644,696,185 635,508,743
Stock options 10,747,624 -
Diluted weighted average number of shares outstanding 655,443,809 635,508,743
Total common shares outstanding 644,696,185 641,897,009
Total potential diluted common shares 671,597,185 669,198,009
17. RELATED PARTY DISCLOSURES
A number of key management personnel, or their related parties, hold or held
positions in other entities that result in them having control or significant
influence over the financial or operating policies of the entities outlined
below.
a) Trading transactions
The Africa Finance Corporation ("AFC") is deemed to be a related party given
the size of its shareholding in the Company. There have been no other
transactions with the AFC other than the Gold Stream liability as disclosed in
Note 8, and the secured loan as disclosed in Note 9.
b) Compensation of key management personnel
The remuneration of directors and other members of key management during the
three months ended March 31, 2023, and 2022 were as follows:
Three months ended
March 31,
2023 2022
Salaries
Current directors and officers (i) (ii) $ 236,662 $ 161,487
Former directors and officers $ - $ 36,818
Directors' fees
Current directors and officers (i) (ii) $ 137,472 $ 90,328
$ 374,134 $ 288,633
((i) Key management personnel were not paid post-employment benefits,
termination benefits, or other long-term benefits during the three months
ended March 31, 2023, and 2022.)
((ii) The Group paid consulting and director fees to both individuals and
private companies controlled by directors and officers of the Group for
services. Accounts payable and accrued liabilities at March 31, 2023, include
$nil (December 31, 2022 - $102,092) due to directors or private companies
controlled by an officer and director of the Group. Amounts due to or from
related parties are unsecured, non-interest bearing and due on demand.)
( )
18. FINANCIAL INSTRUMENTS
The Group's financial instruments are classified as follows:
March 31, 2023 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 4,505,071 - 4,505,071
Amounts receivable 240,009 - 240,009
Total assets $ 4,745,080 - 4,745,080
Liabilities
Accounts payable and accrued liabilities $ 59,749,547 805,801 60,555,348
Loans and borrowings 27,982,480 - 27,982,480
Gold stream liability - 23,507,987 23,507,987
Lease liabilities 14,465,191 - 14,465,191
Total liabilities $ 102,197,218 24,313,788 126,511,006
December 31, 2022 Measured at amortized cost Measured at fair value through profit and loss Total
Assets
Cash and cash equivalents $ 6,688,037 - 6,688,037
Amounts receivable 220,442 - 220,442
Total assets $ 6,908,479 - 6,908,479
Liabilities
Accounts payable and accrued liabilities $ 54,121,704 2,215,585 56,337,289
Loans and borrowings 28,142,654 - 28,142,654
Gold stream liability - 25,039,765 25,039,765
Lease liabilities 15,409,285 - 15,409,285
Total liabilities $ 97,673,643 27,255,350 124,928,993
The fair value of these financial instruments approximates their carrying
value.
As noted above, the Group has certain financial liabilities that are held at
fair value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques to measure fair value:
Classification of financial assets and liabilities
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
Level 3 - inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs).
As at March 31, 2023 and December 31, 2022, all the Group`s liabilities
measured at fair value through profit and loss are categorized as Level 3 and
their fair value was determined using discounted cash flow valuation models,
taking into account assumptions with respect to gold prices and discount rates
as well as estimates with respect to production and operating results for the
Segilola mine.
19. CAPITAL MANAGEMENT
The Group manages, as capital, the components of shareholders' equity. The
Group's objectives, when managing capital, are to safeguard its ability to
continue as a going concern in order to develop and its mineral interests
through the use of capital received via the issue of common shares and via
debt instruments where the Board determines that the risk is acceptable and,
in the shareholders' best interest to do so.
The Group manages its capital structure, and makes adjustments to it, in light
of changes in economic conditions and the risk characteristics of the
underlying assets. To maintain or adjust its capital structure, the Group may
attempt to issue common shares, borrow, acquire or dispose of assets or adjust
the amount of cash.
20. CONTRACTUAL COMMITMENTS AND CONTINGENT LIABILITIES
Contractual Commitments
The Group has no contractual obligations that are not disclosed on the
Condensed Interim Consolidated Statement of Financial Position.
Contingent liabilities
The Group is involved in various legal proceedings arising in the ordinary
course of business. Management has assessed these contingencies and determined
that, in accordance with International Financial Reporting Standards, all
cases are considered remote. As a result, no provision has been made in the
interim financial statements for any potential liabilities that may arise from
these legal proceedings.
Although the Group believes that it has valid defenses in these matters, the
outcome of these proceedings is uncertain, and there can be no assurance that
the Group will prevail in these matters. The Group will continue to assess the
likelihood of any loss, the range of potential outcomes, and whether or not a
provision is necessary in the future, as new information becomes available.
Based on the information available, the Group does not believe that the
outcome of these legal proceedings will have a material adverse effect on the
financial position or results of operations of the Group. However, there can
be no assurance that future developments will not materially affect the
Group's financial position or results of operations.
21. SEGMENTED DISCLOSURES
Segment Information
The Group's operations comprise three reportable segments, being the Segilola
Mine Project, Exploration Projects, and Corporate.
Three months ended Segilola Mine Project Exploration Projects Corporate Total
March 31, 2023
Profit(loss) for the period $ 4,662,903 $ (163,572) $ (167,984) $ 4,331,347
-revenue 40,287,830 - - 40,287,830
-consulting fees (331,033) (117,869) (54,497) (503,400)
-salaries and benefits (317,453) - (375,846) (693,299)
-depreciation owned assets (7,153,854) (2,168) (9,501) (7,165,523)
-impairments - (3,096) - (3,096)
-interest expense (3,370,781) - - (3,370,781)
March 31, 2023 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 36,084,549 $ 42,251 $ 1,920,651 $ 38,047,451
Non-current assets
Deferred income tax assets - 89,061 - 89,061
Prepaid expenses, advances and deposits 33,186 - 211,145 244,331
Right-of-use assets 15,072,816 - 594,834 15,667,650
Property, plant and equipment 147,367,956 537,791 157,654 148,063,401
Intangible assets 128,919 20,589,572 - 20,718,491
Total assets $ 198,687,426 $ 21,258,675 $ 2,884,284 $ 222,830,385
Non-current asset additions $ 10,527,299 $ 2,612,033 $ 1,337,066 $ 14,476,398
Liabilities $ (127,519,042) $ (1,465,503) $ (2,498,197) $ (131,482,742)
Non-current assets by geographical location:
British Virgin Islands
United Kingdom
Senegal Nigeria Canada Total
March 31, 2023
Prepaid expenses, advances and deposits - 5,619 33,185 205,527 - 244,331
Right-of-use assets - - 15,072,816 594,834 - 15,667,650.00
Property, plant and equipment 396,218 - 147,520,674 141,699 4,810 148,063,401
Intangible assets 11,452,918 - 9,265,573 - - 20,718,491
Total non-current assets $11,849,136 $5,619 $171,892,248 $942,060 $4,810 $184,693,873
Three months ended Segilola Mine Project Exploration Projects Corporate Total
March 31, 2022
Profit (loss) for the period $ 4,634,699 $ (60,571) $ (1,083,190) $ 3,490,938
- revenue 24,865,482 - - 24,865,482
- consulting fees (137,835) (30,174) (156,345) (324,354)
- salaries and benefits (37,913) - (288,073) (325,986)
- depreciation owned assets (5,000,920) (2,234) (1,463) (5,004,617)
- impairments - (2,701) - (2,701)
- interest expense (3,758,131) - - (3,758,131)
December 31, 2022 Segilola Mine Project Exploration Projects Corporate Total
Current assets $ 36,334,005 $ 120,752 $ 831,907 $ 37,286,664
Non-current assets
Deferred income tax assets - 87,797 - 87,797
Prepaid expenses, advances and deposits 74,667 - 208,158 282,825
Right-of-use assets 16,232,353 - 617,049 16,849,402
Property, plant and equipment 149,050,728 339,785 123,404 149,513,917
Intangible assets 150,747 19,080,461 - 19,231,208
Total assets $ 201,842,500 $ 19,628,795 $ 1,780,518 $ 223,251,813
Non-current asset additions $ 10,527,299 $ 2,612,033 $ 1,337,066 $ 14,476,398
Non-current assets by geographical location:
British Virgin Islands
United Kingdom
December 31, 2022 Senegal Nigeria Canada Total
Prepaid expenses, advances and deposits - 7,024 74,667 201,134 - 282,825
Right-of-use assets - - 16,232,354 617,048 - 16,849,402.00
Property, plant and equipment 176,645 - 149,230,320 101,491 5,461 149,513,917
Intangible assets 10,704,623 - 8,526,585 - - 19,231,208
Total non-current assets 10,881,268 7,024 174,468,785 919,673 5,461 185,877,352
22. PRIOR PERIOD RESTATEMENT
Following the conclusion of the audited consolidated financial statements for
the year ended December 31, 2022, the Group identified the restatements below
for the Three-month period ended March 31, 2022:
1 - Capitalization of $2,983,318 of stripping costs within "Property, Plant
and equipment" as these related to improved access to ore as determined by
"IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine";
2 - Capitalization of $307,147 of near mine exploration costs within
"Intangible assets" as these meet the definition of an asset in accordance
with "IFRS 6 - Exploration for and Evaluation of Mineral Resources";
3 - Reclassification of $5,891,035 of amortization and depreciation of
operational assets to "Cost of sales";
4 - Reclassification of $2,183,811 of foreign exchange gains to "Production
costs" as the foreign exchange resulted from the purchase of raw materials,
spare parts and other operational inputs required to support and maintain the
Segilola mine operations; and
5 - Reclassification of $3,495,992 of restricted cash cashflows from "Net cash
flows from operating activities" to "Net cash flows used in investing
activities".
Therefore, in accordance with "IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors", the Condensed interim consolidated
statements of financial position, Condensed interim consolidated statements of
comprehensive income and Condensed interim consolidated statements of cash
flows for the three-month period ended March 31, 2022 have been restated. The
impact of the restatements on these statements is demonstrated below:
Condensed interim consolidated statements of financial position
Condensed interim consolidated statements of comprehensive income
Condensed interim consolidated statements of cash flows
23. SUBSEQUENT EVENTS
EPC Contract
As of the date of these Interim financial statements, the Group has made all
outstanding due payments in relation to the EPC contract. At March 31, 2023,
this amounted to US$1,463,353.
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